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TMI Blog2006 (1) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... 001. Pursuant to the said notification, considering section 3(3) of the Special Courts Act, all properties, movable and immovable stand attached simultaneously. The record shows that the Custodian confirmed the attachment on 1-11-2001. The Respondent No. 1 filed an application being Original Application No. 233 of 2002 against the Petitioner herein. The Petitioner took out Misc. Application for impleading the custodian as party in O.A. No. 233 of 2002. That came to be rejected by order dated 16-3-2005. The Petitioner aggrieved by the said order preferred an appeal before the Appellate Tribunal namely D.R.T. That came to be rejected by order dated 19-8-2005. The present petition has been filed to challenge that order. 3. Before D.R.T. it was argued on behalf of the Petitioner, that the Custodian under Special Courts Act ought to be joined as necessary party, as the Petitioner was a notified party under the Special Courts Act. This was opposed by the Respondent Bank on the ground that defendant No. 2 has been sued merely as a guarantor and therefore, provisions of the Special Courts Act are not attracted. Before the learned Member of the D.R.T. it was contended that section 9A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being legislation subsequent to the provisions of the Special Courts Act and considering the provisions of sections 17, 18 and 34, it is the D.R.T. alone which would have jurisdiction and the Special Court would have no jurisdiction. Section 34, it is submitted, would have an over-riding effect considering the Judgment in Allahabad Bank v. Canara Bank AIR 2000 SC 1535 and jurisdiction of the D.R.T. is exclusive. Reliance has been placed on the judgment of the Apex Court in the case of Tejkumar Balkrishna Ruia v. A.K. Menon AIR 1997 SC 442. That was the judgment on the issue as to whether the property of the notified person acquired by him and income generated by his own labour after the date of notification stands attached. The Apex Court was pleased to hold that it is only the property of the notified person as on the date of notification which is attached and not the property which he may subsequently acquire. That judgment is really of no assistance. Similarly reliance was placed on the judgment in the case of BOI Finance Ltd v. Custodian AIR 1997 SC 1952. One of the issues which arose in that judgment was, what is the effect of attachment of the properties on the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mencement of the Special Court (Trial of Offences Relating to Transactions in Securities) Amendment Act, 1994, no Court other than the Special Court shall have, or be entitled to exercise any jurisdiction, power or authority in relation to any matter or claim referred to in sub-section (1)." For the sake of convenience section 9A(1) may be reproduced : "On and from the commencement of the Special Court (Trial of Offences Relating to Transactions in Securities) Amendment Act, 1994, the Special Court shall exercise all such jurisdiction, powers and authority as were exercisable, immediately before such commencement by any Civil Court in relation to any matter or claim : ( a ) relating to any property standing attached under sub-section (3) of section 3." Sections 3(3) and (4) reads as under : "(3) Notwithstanding anything contained in the Code and any other law for the time being in force, on and from the date of notification under sub- section (2), any property, movable or immovable, or both, belonging to any person, notified under that sub-section shall stand attached simultaneously with the issue of the notification. (4) The property attached under sub-section (3) shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise jurisdiction which the Civil Court would have, relating to any properties which stand attached by virtue of sub-section (3) of section 3 of Special Courts Act. In other words, it is a Special Act in respect of the transactions of Securities for a particular period of time. Secondly, if the person was notified, then as the properties stood attached by operation by law, the jurisdiction stands conferred on the Special Court to exercise the powers of the Civil Court in so far as attached properties are concerned. The D.R.T. Act on the other hand deals with the claims by the banks in respect of the loans advanced. In other words, they operate in two different fields or cover different subjects. The Special Court is in respect of the Securities and properties attached pursuant to notification, D.R.T. has jurisdiction to decide all issues pertaining to claims arising from loans. That would be both as principal or guarantor. The Special Courts Act exercises a jurisdiction in respect of properties of a principal or guarantor, dealing in securities and who is notified, in other words a distinct class of loanees. In our opinion, therefore, considering the scope and intent of the two l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same principle will have to be applied in the instant case. The property of the notified person is attached by operation of law. Section 3(4) empowers the Special Court to deal with the property. The Legislature finding absence of power in the Special Court in dealing with the properties of a notified person and as such by the Amendment Act also conferred such power on it. In other words dealing with the properties of a notified person, would be that of the Special Court which will exercise the same powers as that of a Civil Court. What that would mean is that if a financial institution obtains a certificate under D.R.T. Act and if in execution, any property of a notified person is required to be sold in satisfaction of the certificate, then the financial institution will have to move the Special Court for necessary directions which can mean filing claim before the Special Court. In that event the Special Court as a Civil Court while disposing of the assets will have to consider the claim as set out in the certificate and accordingly, dispose of the application. In our opinion, if such construction is adopted, then the two Acts can be harmoniously construed. The power conferred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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